Shimano Corp. reported sales rose 14.3 percent to ¥69.8 billion ($707 mm) in the second quarter ended June 30 as a weak yen helped offset the foul economy and weather in Europe its largest market.
While Japanese company does not report currency-neutral figures, the figures indicate a mid-single-digit decline in sales given that Europe and the United States reprsent the company's largest markets. The yen depreciated 18.4 percent against the dollar and 23.5 percent decline against the euro since June 30, 2012.
Shimano reported sales at its Bicycle Components division increased 14.0 percent to ¥55.0 billion ($557 mm), while sales by the Fishing Tackle division rose 15.4 percent to ¥14.8 billion ($149 mm). Gross profits reached ¥25.4 billion ($258 mm), or 36.4 percent of sales, down 160 basis points from the year earlier period. SG&A increased to 15.3 percent to ¥13.9 billion ($141 mm), or 20.0 percent of sales, up 20 basis points. Operating income improved 5.6 percent at Bicycle to ¥10.8 billion ($109 mm), but fell 28.0 percent at Fishing to ¥681 billion ($7 mm).
Net income reached ¥10.1 billion ($103 mm), up 22.9 percent from a year earlier.
In Europe sales of bike components were stifled throughout the first half of the year by the stagnant economy, a cold, harsh winter and unusually cold and wet spring. Unfavorable weather also suppressed sales in Japan while sales began improving in the United States with the arrival of warm weather in May.
Sales of Fishing Tackle finally began to pick up in Japan in the first half, but remained sluggish in Europe and North America due to the cold and wet weather. Despite concerns about a slowdown of the Chinese economy, sales to retailers in Southeast Asia remained strong.
Shimano ended the period with inventory valued at ¥27.6 billion ($289 mm), up 19.1 percent. Inventories of finished bicycles remained slightly elevated in both Europe and North America at the end of the period, while inventories of components were at appropriate levels. Shipments of the company’s new Deore and Altus mountain bike components and Claris road bike components buoyed sales throughout the first half as did a 20 percent decline in the value of the yen against the dollar.
Shimano lowered its earnings forecast for the full year to operating income of ¥43 billion and net income of ¥31 billion, compared with forecasts of ¥44 billion and 29.5 billion respectively issued in April. The company expects slow to no growth in Europe, moderate growth in the United States and robust growth in Japan, where the weak yen has triggered an export boom that has spurred both personal and business spending.
